May 012016

Breaking with the company’s tradition of the Sergi, Google’s CEO Sundar Pichai writes this year’s founders letter laying out how the search engine giant is focusing of artificial intelligence and the machine learning.

Pichai’s view of the world seems to tie in very closely with founders Larry Page and Sergei Brin with him laying out a vision of making the internet and computers accessible to all.

The challenge for Google is the shift away from personal computers, something that the company is struggling with and a factor that Pichai acknowledges.

Today’s proliferation of “screens” goes well beyond phones, desktops, and tablets. Already, there are exciting developments as screens extend to your car, like Android Auto, or your wrist, like Android Wear. Virtual reality is also showing incredible promise—Google Cardboard has introduced more than 5 million people to the incredible, immersive and educational possibilities of VR.

Whether Google can execute on that vision and manages to diversify its revenues away from depending almost exclusively upon web advertising will be what defines Pichai’s time as the company’s CEO. He has a challenging task ahead.

Apr 202016
the taxi industry is being disrupted by mobile apps

“It has to be disruptive technology,” bleated the consulting firm facilitator at the Future Transport Summit in Sydney earlier this week.

The hapless, but well paid, consultant — a depressingly frequent feature of Australia’s current ‘ideas boom’ — was protesting when one of the participants at his ‘ideation session’ had raised topics such as integrated timetables and changing commuting habits.

Mr Consultant’s running orders for his ‘ideation session’ were to focus on ‘digital disruption’ and his employer;s cluelessness illustrates a danger for business leaders and policy makers.

Selling the snake oil

Digital disruption is real however it’s not just the only factor facing governments and industries. Demographics, economics, politics and climate change will have greater influences on business and society.

Uber, the favourite lovechild of those spruiking digital disruption snake oil, is a very good case in point. While the service certainly has disrupted the taxi and motor vehicle industries, these sectors were facing major challenges as governments enacted policies to reduce carbon emissions, voters became tired of cartel like taxi companies and the Western world’s young and wealthy moved back to the cities and away from owning motor vehicles.

If anything, Uber was the result of GenY entrepreneurs like Travis Kalanick finding existing services didn’t meet their needs rather than the result of technology desperately looking for a problem to solve finding a niche.

Complex changes

While the smartphone was critical in Uber’s success in disrupting the global taxi industry, technology was only one facet of a much more complex set of changes.

The motor industry is a good example of the complexity of change. A hundred years ago it was clear the transport industry was about to be disrupted by the automobile, it was by no means obvious access to affordable personal transport would allow urban sprawl and the suburbanisation of western society.

Coupled with the motor car and truck, the availabilty of mains electricity meant refrigeration also became accessible which lead to the rise of supermarkets after World War II. This disrupted the local corner store in ways shopkeepers could never have foreseen in the interwar years.

Shifting demographics

Now, the opposite is happening as the young and affluent reject long commuting times from distant suburbs and city densities start increasing.

The social and economic factors that drove Uber are affecting public transport usage patterns and it’s no coincidence that the cities where ride sharing services have most successful, such as Sydney, also have underfunded public transport systems that are struggling to meet their population’s demands.

Which brings us back to the foolishness of discussing the future of transport only in relation to technology. Smartphones, apps, big data and the internet of things will all be critical parts of future transportation but the social and economic factors will shape how people use the networks.

Focusing on technology while ignoring the other big influences is a folly that will cost businesses and government dearly. Although one suspects the management consultancies will do well regardless of how well change is managed.

Apr 192016

A week or so ago we reported why LogMeIn’s CEO, Bill Wagner, wasn’t interested in participating in the Internet of Things industry groups as they are too bureaucratic and slow in a fast moving sector.

Last week I asked John Stewart, Cisco’s Chief Information Security Officer, about how the networking giant thinks about this attitude given Cisco is a key member of a number of IoT standards groups.

Stewart’s view is nuanced, “the notion of open operability versus standards is where the world needs to be. We’ve been pushing this notion of open interoperablity knowing that standards might take longer but yet you don’t want to create these islands of operational capabilities that need to be stitched together in weird ways. That would add friction to the world.”

“There’s not much room for non-interoperable systems as they would have to connect with something else,” Stewart added.

In this, Cisco’s Stewart agrees with Ericsson’s Esmeralda Swartz who believes device diversity will beat vendor’s attempts to lock customers into their IoT platforms.

While it may be true that industrial and smartcity technologies will be interoperable in order to work within complex systems, it’s highly likely many consumers devices will be locked into proprietary systems so vendors can monetize them.

For consumers, users and citizens the questions of interoperability and standards are going to be a pressing question as connected devices become common and in some cases unavoidable.


Apr 182016
Innovation index versus GDP

After two complacent decades Australia’s pivot away from a mining and housing  based economy is promising to painful. In anticipation of the punishment to come, the nation’s political and business leaders have devised a safe word they hope will ease the pain — innovation.

That safe word was desperately repeated as a group of “innovation rock stars” gathered last week at Sydney’s Knowledge Nation summit, billed as bringing together the nation’s leaders to drive the implementation of the Australian Government’s National Innovation and Science Agenda.

Knowledge Nation showed that despite having a safe word Australia’s Anglo-Saxon, male dominated elites aren’t prepared for an economic pivot and true change in the nation will have to be a grass roots movement led by small business and community groups.

A lack of diversity

Notable in the selection of “key leaders from the innovation, science and technology ecosystem, including entrepreneurs, business leaders, investors, researchers and scientists, and policymakers” was the lack of diversity.

A look of the speaker list showed only four of the fifteen speakers being women and only one of the 15 not being from an Anglo-Saxon background.

One of the baffling things about modern Australian is the how few from non-Anglo groups feature among the ranks of the business, politics or media leaders. Yet Australia’s greatest success has been in integrating the successive immigration waves over the late Twentieth Century.

A visitor to Australia could be forgiven for not noticing the country’s diverse population as the media, politics and business is dominated by those of British heritage. For the country, this is a tragic wasted opportunity and was reflected in the line up of ‘innovation rockstars.’

Disjointed government

The political ‘leadership’ also reflected that lack of diversity with three Federal government ministers — all men and no opposition, state or local figures — lined up to recite the grab bag of thought bubbles that are what now passes as policy in Australian government.

Ministers offered succession of turgid recitals of disjointed programs which do little to address Australia’s structural barriers towards innovative businesses or the wholesale defunding of education institutions although the Innovation Minister’s snarling response to an academic’s question about R&D spending told much about their defensive posture.

The political ‘leaders’ illustrated a key problem in the nation’s pivot. The long term failure of consistent planning across portfolios means no Australian investor, entreprenuer or student can have any confidence in government policies over a five or ten year horizon when policies barely survive one ministerial thought bubble.

Overall though the biggest gap in the Knowledge Nation summit was its focus on government — the real weakness however lies in the corporate sector where inward facing service industries are distributing more on dividends than in research and development.

Inward focus

That inward focus, articulated well by CEO Matt Barrie who described how almost all of the nation’s twenty biggest corporations are domestically focused service businesses, is the real problem facing Australia as it tries to pivot its economy away from being dependent on the fading Chinese commodities boom and domestic property speculation.

A lack of globally competitive businesses leaves the nation exposed as most employment is in organisations that are unable to survive outside a relatively protected domestic market. It also means these companies don’t see the need to invest in research and development as their fat profits are dependent upon market dominance rather than innovative products and services.

Barrie also had the only challenging idea in a day that promised many of them, the somewhat tired trope of abolishing Australian state governments.

Government focus

It’s quite touching that Barrie sees Australian Federal governments as being havens of intelligent, long term policy making when all the data indicates otherwise. The very idea of Canberra running education given its flip flopping on the Gonski reforms, confused policies on university funding and ideological obsession with funding elite private schools is, quite frankly, derisory.

That the most challenging idea out of the day was the old chestnut of flattening Australian government speaks volumes of the dearth of original thinking coming out of the nation’s business and political leadership.

In truth, Australian business needs to be snapped out of its inward rent seeking focus while the household sector needs to be weaned off speculating on residential property. These require real policy reform and cultural change.

Little leadership

Knowledge Nation showed there no understanding, let alone no appetite for that reform or change from Australia’s elites and as the Australian economy starts to feel the pain from twenty years of complacency we can expect the safe word of ‘innovation’ to be increasingly used by the nation’s elites.

The lesson from Knowledge Nation is Australia’s economic pivot will come from the grassroots. It will be startups, small businesses, community groups and local governments that will lead the change. Australians waiting for government support and corporate leadership will be waiting a long time.

In meantime, squealing ‘innovation’ at every sign of economic pain will be occupying much of the time of Australia’s comfortable Anglo elites.

Apr 132016

Can Japan reinvigorate its startup community? A story in the Wall Street Journal describes some of the attempts to encourage entrepreneurs in an economy that has been stagnant for a quarter century.

In many ways Japan is a prototype for the modern global economy, just as the Japanese tried to stimulate their economy following their 1989 bust by pumping money into their deeply corrupt construction industry , so too has the rest of the world tried a similar strategy with the banking system after the 2008 crisis.

The results in both cases been the same stagnation as the money is wasted on non productive schemes and speculation rather than investment in job and wealth creating businesses and innovations.

Now the Japanese are looking to a bottom up stimulus to their economy which challenges the country’s social norms where getting a ‘safe job’ with a large corporation is seen as the best prospect for young people.

While this is a change from the accepted wisdom, the entrepreneurial model really isn’t that strange for the Japanese with a range of successful technology companies started by post World War II entrepreneurs ranging from Sony to Softbank.

The Japanese model though may not be suited to the Silicon Valley venture capital model and this is where it’s dangerous to make comparisons with what works in San Jose, Tel Aviv or Shoreditch.

Japan’s strengths in industrial engineering may well make its businesses well suited for the Internet of Things the Wall Street Journal article quotes serial entrepreneur Taizo Son as suggesting. Interestingly, the 43 year old serial entrepreneur is the youngest brother of SoftBank founder Masayoshi Son.

Another area where Japan is a glimpse of the future is in the aging population and it may well be that harnessing the abilities of older entrepreneurs is another area where the country can either show the way to success or what not to do with an older, stagnant economy.

In many ways Japan is a pointer to where the world is heading. How they manage the early twenty-first century will be a lesson for the rest of us.

Apr 112016

Life changes when you become the chief executive says Bill Wagner, the CEO and President at remote access company LogMeIn. “I now spend thirty percent of my time with investors,” he says

Wagner, previously the company’s Chief Operating Officer, took over the leadership at LogMeIn last September after founder Michael Simon  stepped down.

The company is in the midst of a major change as Simon steered the company toward the Internet of Things in response to the shift away from desktop personal computing that had been the business’ core market.

LogMeIn’s IoT strategy is around being a trusted platform for controlling the myriad household, CEcommercial and industrial devices that want to connect to the internet, with Wagner only seeing AWS as being their main competitors that has seen a range of companies entering in the last few years.

“I don’t think IoT will be a wave, it’s more like a rising tide,” Wagner says.

Wagner is one of the IoT’s enthusiasts citing applications ranging from the insurance sector through to connected clothing as being potential markets, although industrial application may be the earliest adopters of LogMeIn’s services. “The more industrial the industry, the more mature is M2M to IoT adoption,” he observes.

That adoption though is tempered by the presence of industry groups where Wagner maintains LogMeIn’s hostility towards slower moving associations such as the Industrial Internet Alliance and proprietary platforms like Google Nest.

An advantage Wagner sees in his taking over as LogMeIn’s Chief Executive Officer is his experience with the company, “I don’t know how externally recruited CEOs manage it,” he observes.

With LogMeIn facing a continued transition into uncertain markets, the company needs a steady vision. It may be that internal recruitment is an important strategic move.

Apr 052016

With vendors shutting down connected devices and restricting data feeds, customers demanding open source software and open standards may be essential to safeguard against companies misusing their power over the IoT.

Last night I had dinner with a group of executives from US telco CenturyLink. During the the evening, conversation turned to the use of US and Chinese routers and the risks of government mandated backdoors in both countries’ equipment.

My thought during that conversation is concerns about software backdoors are a compelling argument for these devices to run open source software, making it harder – although not impossible – for hidden nasties harder to be built into systems.

Google Nest becomes evil

Overnight that argument for open source became stronger in my mind with the news Google Nest were to shut down the Revolv home automation hubs the company bought two years ago.

Google aren’t just stopping support for these devices, they are going to render them useless to their owners. It’s a remarkable move that undermines any confidence customers can have in Google’s hardware offerings.

While Revolv isn’t the first and will be far from the last Internet of Things device to be abandoned by its vendor, its fate indicates the importance of keeping as much of the ecosystem as open as possible – the less vendor lock there is, the less hostage you are to rapacious manufactures.

Locked out of the subscription economy

As we’ve seen with Amazon in the past, the ‘subscription economy opens users to the risk they can be locked out of their data or purchased apps. Now we’re seeing how vendors can lock users out of the products entirely.

With connected cars and homes now becoming common, this is something that should concern buyers. As we see everything from door locks to smoke detectors and kettles being connected to the Internet of Things, the risk of being at the mercy of an unreasonable vendor or malfunctioning software becomes greater.

At least with an open source model, it’s easier to build workarounds when faced with an uncooperative supplier and, in a world full of poorly designed IoT products, it’s possible for the community to review the software and understand its bugs.

The security aspect of open platforms is also critical for the IoT as we’re already seeing a plethora of unpatched devices where vendors have long lost interest in supporting the older products.

Open interoperation

More importantly, open platforms make it easier for devices to work together, something that is critical in connected buildings or industries. At the moment the IoT is a mish mash of competing standards and formats.

Over time it won’t be surprising to see the market demanding more open source applications and data feeds – indeed we’re seeing this happen with artificial intelligence platforms – the proprietary model brings in too many risks and makes the IoT far more complex.

While open source software won’t solve problems such as APIs and data feeds being closed or changed, it does give more power back to users and communities. It’s not hard to understand why vendors though would resist these moves.